You don’t have to wait till when you want to sell or remortgage the house before you know it’s worth it. In case you don’t know, your home is part of your net worth knowing its value helps you keep track of your financial well-being, and should you need to take credit off your home equity, you don’t want to overprice your home and increase your debt profile.
Normally, real estate professionals recommend you keep a tab of your house value within two to three years to help you understand market trends. Though, your home value is influenced by its size and age, location, local market conditions, comparable homes that have sold recently, the economic conditions, interest rate, and the renovations and repairs that the house requires. But, here is a simplified guide to help you know the worth of your home.
Use Online Valuation Tools
There are varieties of online home value calculators that use the information you provide about your home and the ones culled from public records to calculate an estimated value of your property. These online calculators are simple and convenient tools that use the information to determine the worth of your home.
As swift as online home value calculators can be, they do not consider the unique features of your house that may attract potential buyers to pay a higher asking price, nor does it consider that there are renovations that could tank your asking price. Also, the estimates given vary from one online calculator to the other as they have different variables for determining the worth of property.
Consult A Realtor
You can let a realtor help you determine the worth of your home as they have the requisite know-how of the real estate market. However, the process used by realtors to estimate the value of a home is called Comparative Market Analysis (CMA). The way the CMA works is that realtors access information about comparable homes in your area that is like your property and factor in certain similarities to help in determining fair market value for your home.
A licensed realtor will have access to a database of homes in an area that is listed for sale or in the market. The filter options for realtors with the database are size, location, number of bedrooms and bathrooms, style and view, home type (condo, single-family home, townhouse), the recent sale price of a similar property to arrive at an estimated valuation for your home.
The snag in this option is that you have an open contract with the realtor to prioritize him or her when you are ready to sell.
Use The Professional Appraisal Route
A professional appraiser provides an impartial and thoroughly researched estimate of a home’s value. Verified data backs the value given by an appraiser’s research about the property which can be used when you are ready to list it or complete an underwriting loan for the property.
Appraisers have a checklist to run through to determine the value of your home which includes its residential location and whether it is in a FEMA flood zone, utility service and fixtures, when it was built, foundation type, condition of the attic and basement, heating and air systems, walls, windows, and doors, considers amenities such as pool, deck or fireplace, condition of home appliances, highlights structural improvements or repairs that have been done in the house, underlines any sign of damage and additional repairs needed.
A home appraiser also considers the sales history of the home and the approximate replacement cost to rebuild the home before giving an estimate.
Create Your Own Property Comparison Tools
You can also choose to use a self-created comparison tool to get an estimated market value for your property. These comps include the structural components and features of your home, its age and size, the sales history, overall condition of the home, your neighborhood and location, upgrades and improvements needed, listing price, and actual sale price for similar properties in your area.
Some online websites and tools accommodate your comparisons and use them to give you an estimate for your property but note that you still need to follow the market trend to know if the value generated is not too high or low.
This self-help guide and its accompanying tools can help you determine the value of your property but that does not mean it would be the same in six months or one year, so endeavor to consider market trends in any options you used to value your home.